Cemex offers investment sweetener?

Cemex offers investment sweetener?
Published: 06 March 2006

The Colombian subsidiary of Cemex is set to double investments in 2006 in response to high sales in the country, newspaper El Norte quoted the firm’s planning and development VP, Juan Carlos Delrieu, as saying. Since Cemex started up business in Colombia in 1996, it has invested US$8-10m a year, but this year the figure will be between US$16m and US$20m, according to Delrieu. 
 
"The most important thing is that we are selling a reasonably high volume; high enough for us to be obliged to reconsider our investment policy substantially," added Delrieu. Although the company’s figures for last year are not due to be released until mid-March once they are fully reviewed, Delrieu predicted that in terms of production and sales Cemex Colombia would experience growth of more than 30 per cent.  For this year the cement maker expected demand for cement to rise by five per cent and production could reach the heights of 8Mt seen in the 1990s.

The acquisition by the Argos Group of independent producer Cementos Andino has also allowed Cemex, Argos and Holcim and others to raise their domestic cement prices considerably, and this latest news release might be construed as a something of a sweetener to the Colombian authorities, who are now investigating the terms of the Cementos Andino sale and the resultant rapid increase in local cement prices, especially after an intense price war which saw Andino driven to the wall by the actions of these larger groups.